Report of the NACD Blue Ribbon Commission on Board and Long-Term Value Creation

In brief: Leaders in all organizations face short-term pressures ranging from economic conditions to competitor activities to demands from shareholders and stakeholders. It can be extremely difficult for management teams—and board members—to set aside immediate demands and concerns in the interest of long-term goals that might seem distant and abstract. The Report of the NACD Commission on the Board and Long-Term Value Creation emphasizes that directors have a fundamental responsibility to ensure that the organization’s short-term actions are aligned with its long-term strategy. The report outlines 10 recommendations for boards and a list of warning signs that indicate potential misalignment between short-term operations and long-term objectives.

How boards can use this resource:

Use the report’s 10 recommendations as the basis for discussion at board and/or key committee meetings.

Assess the current level of alignment between the organization’s short-term activities and long-term strategy, and identify potential areas for improvement.

Use the tools and questions provided in the report’s appendices to inform and improve boardroom practices, including CEO succession planning; discussions with management about risk appetite, capital allocation, and talent strategy; executive compensation plan design; and engagement with shareholders.

Most relevant audiences: Board members of public, private- and non-profit organizations, especially chairmen, lead directors and committee chairs